Special Report: A Winning Doubleheader

Call it a winning doubleheader.

A do-or-die moment for Time Inc.’s veteran sports journal Sports Illustrated and its fledgling SI.com would have to have been the 2004 Summer Olympics in Athens, where a dozen journalists were instructed to ignore weekly deadlines in favor of reporting news from the games in real time. “We pretty much turned the spigot on,” recalls SI.com managing editor Paul Fichtenbaum. “They poured it out over the Web site, and the information was richer. And writers got immediate feedback.”

But even as it scored points for its online coverage of those games, Sports Illustrated the magazine would, the following year, earn the National Magazine Award in the Leisure Interests category from the American Society of Magazine Editors for its ambitious Olympics preview. It is a perfect example of how those guiding the venerable brand—SI president and publisher Mark Ford, SI Group editor Terry McDonell, SI Digital president Jeff Price and Fichtenbaum, who Adweek Magazines has selected as Executive Team of the Year—have turned their once-struggling online property into an All-Star while continuing to move the ball at the core magazine.

The magazine’s story is one of the most fabled in publishing history, and its influence undeniable. When Time Inc.’s Henry Luce launched the title in the early 1950s, there were no general-audience sports magazines. As it turned out, the launch was perfectly timed with the exploding popularity of spectator sports. In time, the magazine not only boomed—today, it’s read by nearly 21 million adults—but went on to become a pacesetter among U.S. magazines, with its early use of multiple color photographs and in-depth reporting.

Today, sports fans are just as likely—and, depending on their age, sometimes more likely—to get their news and information from online as print. But the 52-year-old title continues to be a maverick. Fighting declining ad sales and circulation, SI has been able to slow the losses and stabilize the bottom line.

That stability wouldn’t have been possible without SI’s aggressive push online, one that executives began four years ago. Until 2003, the site was a small operation run out of Atlanta, part of Time Warner’s CNN Sports Illustrated TV network. With an audience at the time of 4 million, the site was usually thrown in as a free banner complementing a TV or print ad sale. Today, it’s part of a portfolio of products, anchored by the flagship magazine. It brings in 20 percent of the group’s revenue and attracts an audience of 8 million. (The magazine’s ad pages dipped 3.5 percent to 2,031.5 last year versus 2005, following a slide of 16.8 percent from 2004 to 2005, according to Publishers Information Bureau.)

As it continues to produce outstanding journalism and photography, SI is finding ways to transfer its knowledge of all things sports to the Web, pulling in a younger audience and keeping the brand relevant. SI.com’s median age is 40, according to Nielsen’s @Plan, which measures user demographics. The transformation has not only boosted the bottom line for the Sports Illustrated Group, but made it a model for other Time Inc. titles as they shift more resources to the Web.

This collaborative effort, in which the digital and print sides support each other, is what makes both the editorial and sales performance on both sides so strong. And while it seems to make so much sense now, it was a tough sell in the beginning.

In 2003, explains Ford, “The bubble had burst.” The Web site was a featherweight in a ring already crowded with network-built sites and portals. In the end, CNN/SI could never really compete with ESPN and Fox Sports Net, and Time Warner shut it down in May 2002. That decision, however, eventually freed the title to take control of Web sales and editorial functions.

Enter Jeff Price, who joined the magazine in 2002 as chief marketing officer (he became SI Digital president in 2005). A former marketer for MasterCard and Gatorade, Price saw the need to position the title as a brand, to take it beyond the confines of the magazine. Agencies, too, were pushing the magazine to give them more than just pages as an advertising option. “When I got here five years ago, it was a magazine-centric conversation,” says Price. Ford put a team in place to go after integrated sales across print, online and mobile.

Serge Del Grosso, executive vp/media planning director at Lowe New York, was director of media at Sony Electronics at the beginning of this transformation. The magazine “recognized early that they needed to integrate content and advertising sponsorship opportunities across all of their digital platforms,” he says. “It wasn’t, ‘Let’s talk about our pages today.’ It was unusual, because it was a dialogue that wasn’t happening with many magazines.”

On the edit side, the handover of control of the Web site from CNN to SI was a chance for McDonell, who had just been appointed managing editor, to secure the magazine’s future. McDonell—who has since taken the job of SI Group editor, overseeing the magazine and its spinoffs, as well as Golf and Golf.com—moved the Web’s editorial staff from Atlanta to New York. He then cast about for someone who shared his vision, and found a kindred spirit in Fichtenbaum, a senior editor at the magazine. As the person in charge of hockey coverage (the least popular spectator sport), Fichtenbaum was used to thinking entrepreneurially when pitching a story. When he told McDonell that the site should have more personality and make use of photos that couldn’t fit in the magazine, McDonell recalls, “I thought, I could be talking to myself.”

Fichtenbaum and McDonell were speaking the same language, and it was translating to a wealth of new ideas. Those early ideas turned into popular features on the site, such as Scorecard Daily, a sports culture and humor news section; photo galleries; and Truth & Rumors, insider and gossip news snippets culled from publications around the country.

It was important to update the site and bulk up the staff (more than 40 now work on the edit side), but getting the magazine staff to buy into the Web was critical. The mandate was decisive: No longer would writers collect a fee for contributing to the Web site; it would now be part of their job description.

The brand’s broadened digital offerings and strong customer service have won fans with advertisers. As a result, digital accounted for 14 percent of total net income last year. The multiplatform vision advanced last month with the launch of SI On Demand, a new video-on-demand channel that will initially feature such offerings as short clips showing the making of the Swimsuit issue and instructional videos from Golf magazine. It eventually will create original programming, execs say.

Melissa Romig, an associate media director for digital at Carat Fusion, who works with clients including Radio Shack and Motorola, says that since SI took over online ad sales from AOL, the team has impressed her with its customer service and flexibility. “I think they’ve gotten to a point where not only do they compete, but we buy them as much if not more than the other big sites because they are very flexible, very responsive in giving us what we want,” she says.

Ford predicts digital will represent half the profits of the SI Group by 2010, up from 20 percent this year. “The goal in three years is to have slow, steady growth on the magazine side, and digital [operating income] will be 50 percent of our bottom line,” he says.

That growth is expected to come from extensions and acquisitions of the sort SI has been announcing in recent months. In the fall of 2006, seeking to build its credibility with team loyalists, SI launched MySI.com, a customizable desktop application designed to sate the most rabid fan with the latest scores and photos of their favorite teams. Recently, it solidified its foothold in social network and user-generated content, acquiring FanNation, a site through which fans and fantasy game players can blog, track players and comment on the news. It also acquired Takkle, a high school sports online network.

Price says that with 59 million avid sports fans in the U.S., the questions he faces are: “What are the reasons they’re engaging in sports media, and how can we truly serve their needs when our objective isn’t to drive them into programming?”

Non-print offerings led the entire franchise, including SI.com, SI Kids, SI Kids.com, Golf and Golf.com, to grow profits 4.3 percent last year, but they also funneled new dollars into the core Sports Illustrated. Ford says offering integrated ad buys helped steer 40 to 50 new advertisers to the magazine in 2006, a year in which investment by its largest category, automotive, plummeted.

“Our job, first and foremost, is to sell really effective print advertising,” says John Squires, executive vp at Time Inc. and Ford’s predecessor as president of SI. “The fact that SI has a vital Web site, VOD, wireless is all good for marketing. But ultimately, it means the brand has more relevance, to young consumers particularly. The dot-com and wireless and VOD help reinforce the print buy.” Indeed, while the median age for SI’s U.S. adult readers is 44.1, readers 18-24 are the fastest growing part of the magazine’s audience, increasing 14 percent over the past two years, according to the most recent MRI survey. Total circ has remained stable, declining 1 percent to 3.2 million in the second half of 2006.

Ultimately, the magazine’s journalism is at the heart of the franchise’s growth. Other sites have fantasy sports as their main draw for fans; SI.com trades on the iconic journalism and photography of the print product. (SI.com dabbled in fantasy sports a couple of years ago, but ultimately decided it wasn’t worth the energy to compete with the more-established sites.)

“A significant part of our traffic is going to our writers, and they’re going through Tom Verducci’s baseball stories, Jon Heyman or Peter King or Dr. Z, and they’re engaging in the content we’re creating,” Price says. “Most of the time spent in the sports space is spent on fantasy. We’ve been able to create franchises around our writers because they have loyal followings. Peter King was the first with ‘Monday Morning Quarterback’ (see story below), but we are looking at that model with [Stewart] Mandel and Tom Verducci. They live in the magazine, they live on the site, they’re doing video features, providing us commentary.”

And SI.com uses its online archives to provide perspective to current stories, something it plans to do more aggressively once those digital archives are complete. “We’ll do a Super Bowl preview package, let’s say, the Bears and the Colts,” Fichtenbaum says. “When we link to some of our Bears stories from 1985, when they won the Super Bowl, it’s remarkable the number of page views we have. When we link contextually, it has a lot of power.”

Work remains before the vision of a seamless print-to-Web operation is fully realized. Now, 39 percent of magazine subscribers visit the site; editors are trying to increase that number, with tactics like two-page photo spreads in print that refer readers to the site to read the story behind the pictures. The print and digital sales staffs were merged last summer; the print and online editorial staffs are set to begin cross training in March, with the goal of being fully cross-trained over the next year.

And for McDonell, the game’s just beginning. He’s looking toward 2008 and the Beijing Summer Olympics, around which he promises monstrous coverage. “We are planning on dominating the Web site’s competition, throwing every resource we can at it, refreshing relentlessly,” he says. Trading, of course, on the magazine’s journalistic tradition. “The whole enterprise is built on that journalism,” Fichtenbaum says. “It’s the authenticity of the brand that gives it the ability to expand.” Lucia Moses is a senior editor for Mediaweek.